China Fibretech on roller-coaster ride after consolidation

Singapore

CHINA Fibretech shares, which underwent a 50-into-one consolidation in May, have undergone hugely volatile trading this week, prompting dealers to once again question the wisdom of forcing companies to undergo share consolidation to meet the Singapore Exchange's new minimum trading price (MTP) of S$0.20.

The company on March 28 said that the consolidation was to enable it to satisfy SGX's MTP and to reduce speculation and volatility in its share price. Based on the price of S$0.0331 on May 25 which was the day before the consolidation took effect, China Fibretech's post-consolidation price should have been around S$1.65. The stock opened at that price on May 26 but closed at S$1.63.